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City Administrator Ulrich asked how financing for the Hanson Boulevard project would <br />compare. <br />Mayor Strommen arrived at 6:07 p.m. and asked Acting Mayor Backous to chair the remainder <br />of this agenda item. <br />Mr. Tinklenberg stated Mn/DOT did not have the money to do the Hanson Boulevard project so <br />they turned it over to Anoka County to advance fund the project with Mn/DOT paying back the <br />County over time through a contractual arrangement. Under this new innovative financing <br />option, tax exempt bonds would be sold to provide the financing mechanism. <br />City Administrator Ulrich asked if the State is to pay from guaranteed revenues or annually <br />appropriated. <br />Mr. Lubervich stated in Florida it was guaranteed that the funds will be appropriated but that is a <br />risk factor the bond holders have to assume. <br />Mr. Tinklenberg stated it does not go against the creditworthiness of Mn/DOT or the State as it is <br />an annual appropriation. <br />Mr. Lubervich stated it also does not show as debt on the Mn/DOT balance sheet. <br />Councilmember LeTourneau stated this is very innovative type of financing and asked how it <br />would be structured for the Armstrong interchange. <br />Mr. Tinklenberg stated the funding gap would be subject to negotiations. He explained if you <br />assume there is a $35 million project and $20 million is not funded, then Mn/DOT would follow <br />the process of putting the project out for bids as a design/build/finance project or as a <br />design/bid/build project. In this case, Anoka County is moving forward to have final design so <br />Mn/DOT would put the project out as a construction/finance project. If approved, the contractor <br />would have this innovative financing option and come back with a bid to Mn/DOT. Then <br />Mn/DOT would enter into a contract, bonds would be sold and used to fill the funding gap, as <br />needed. <br />Councilmember LeTourneau asked if this option would be only to fund the financing gap. <br />Mr Tinldenberg answered in the affirmative. <br />Mr. Lubervich agreed that is ideal but does not have to be the only process as there are other <br />options such as a short-term payment with nothing up front. <br />Councilmember Tossey stated the City knows what it has invested, which is $10 million_ <br />maximum, but it is not known what Mn/DOT will put forward for funding. He felt there was <br />still a chance that Mn/DOT will allocate funding for this project under the $250 million <br />appropriated. Councilmember Tossey asked who facilitates the next step and why come to the <br />City if the City is not "on the hook" for this type of financing. <br />City Council Work Session / May 28, 2013 <br />Page 3 of 8 <br />